Using Nonprofits to Serve Charitable Goals of Social Businesses in the United States: Circumventing the Lack of Recognition of the Social Business Model in the Federal Tax Code

Authors

Gautam Jagannath, Northeastern University School of Law

Abstract

This Article considers the possibility of reincorporating a social business as a tax-exempt nonprofit. An analysis of the costs and benefits is performed with an eye toward federal tax law. First, I discuss the potential problems with running a social business as an exempt nonprofit. There are federal regulations that get in the way of making this a savvy decision. Second, I posit that a social business can benefit from devising a parallel exempt organization with similar or identical charitable goals. There are a few ways to do this and I consider the pros and cons. Finally, I consider the practical hurdles that social businesses face by maintaining and operating tax-exempt organizations within the context of how social businesses have positive consequences for global development.

Recommended Citation

Gautam Jagannath, Using Nonprofits to Serve Charitable Goals of Social Businesses in the United States: Circumventing the Lack of Recognition of the Social Business Model in the Federal Tax Code, 32 Pace L. Rev. 239 (2012)
DOI: https://doi.org/10.58948/2331-3528.1799
Available at: https://digitalcommons.pace.edu/plr/vol32/iss1/7